: GM’s stock soars 5% after company reinstates 2023 guidance and announces $10 billion accelerated share buyback

General Motors Co.’s stock GM soared 5% early Wednesday, after the car maker said its reinstating its 2023 earnings guidance and conducting a $10 billion accelerated share buyback program. The company is also planning to increase its dividend by 33% beginning with the January 2024 declaration. “We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs,” Chief Executive Mary Barra said in a statement. GM twice raised its guidance for all of 2023 but withdrew it in the third quarter while workers were striking. It expects the labor disruption to shave $1.1 billion off adjusted EBIT due to lost production. The reinstated guidance calls for net income of $9.1 billion to $9.8 billion, which compares with a previous range of $9.3 billion to $10.7 billion. It expects adjusted per-share earnings of $6.52 to $7.02, compared with prior guidance of $7.15 to $8.15. The company expects capex of $11.0 billion to $11.5 billion, the low end of its prior range of $11.0 billion to $12.0 billion. The company has canceled a $6.0 billion revolving credit facility it entered in October and plans to enter a new 364-day $3.0 billion committed credit facility with the banks executing the accelerate share buyback. The stock has fallen 14% in the year to date, while the S&P 500 SPX has gained 18.6%.

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